The Levelized Cost of Electric Generation

The cost of necessary transmission lines should be included.
As for turbine maintenance, where are average figures for the cost of gear box replacements? Portsmouth, RI, got an estimate of $580,000 to $730,000 to replace one in a $3 million turbine that failed after 5 years of use.
“Most turbines require significant repairs and even complete overhauls in the 5-7 year range.”
TRIBOLOGY & LUBRICATION TECHNOLOGY
http://www.stle.org/assets/news/document/cover_story_06-10.pdf
Regarding the diminishing returns from renewables, ever hear of the ‘duck curve’?
http://www.sfgate.com/business/article/Energy-grid-duck-chart-used-to-wade-into-timing-4762718.php

richardscourtney says:
February 16, 2014 at 11:09 am
************
Amen Richard and kudos to you for that post. I wish to God that the leftist greenie solar and wind pushers would take the time and be open-mined enough to understand that. I believe their failure or refusal to acknowledge it (among other things) is at the root of their problem. They are so intensely obsessed with the emotional and spiritual need to demonize fossil fuels and nuclear power that nothing else matters to them. It’s like trying to reason with a brick wall.
I just hope and pray that our next president here in the U.S. has at least SOME understanding of what is wrong with the leftist green movement involving their belief system(s) and how they think. If he/she doesn’t, I cannot say that I will have a great deal of confidence in this nation’s long term future.

The first state in USA which deregulated electricity production was California, which introduced energy market in the industry. This led to disaster, since economical model was poorly thought out. When energy was in short supply, operators of the grid had to purchase energy at exorbital prices to balance load and generation output. I translated a monography about this experiment for Russian state energy monopoly which was formed to make market reform of Russian energy industry. The title was “Designing of energy market” and the prices were from this experiment. I believe them more than the prices above since they were based on real experience of the market, not on abstract calculation. Nuclear and coal plants have comparable costs of fuel for kilowatt-hour and comparable capital costs of construction. Fuel costs were 5 time less than for natural gas turbines, but capital costs 5 times higher. Now, with collapse of natural gas prices, this calculation can be different, but coal is still the cheapest way to generate electricity. And there is no alternative to 1000 MhW steam turbine!

jai mitchell says:
February 16, 2014 at 8:21 am
The EIA LCOE analysis is flawed.
NREL Estimates of LCOE for installed domestic wind in 2012/2013 BEFORE SUBSIDIES come in at 0.0675, the trend is that LCOE will continue to go down from there.
Offshore wind currently comes in at 0.185 (convert euros to dollars)
If these wonderful machines are such a bargain how is it that governments everywhere must hand out $billions in loans and grants to their cronies along with contracts with prices from $0.20 to $0.40 /kWhr from now to when the damn things collapse, in order to get anyone to even consider building one?

Ed P says: @ur momisugly February 16, 2014 at 9:56 am
“There are two options”
The other option will soon be here: smart meters are being installed all across the USA (& soon in the UK). These will allow the grid controllers to switch homes partially or fully off when the renewables cannot cope and there is insufficient dispatchable generation….
>>>>>>>>>>>>>>>>>
You beat me to it.
Some links to go with your comment:

The Department of Energy Report 2009

A smart grid is needed at the distribution level to manage voltage levels, reactive power, potential reverse power flows, and power conditioning, all critical to running grid-connected DG systems, particularly with high penetrations of solar and wind power and PHEVs…. Designing and retrofitting household appliances, such as washers, dryers, and water heaters with technology to communicate and respond to market signals and user preferences via home automation technology will be a significant challenge. Substantial investment will be required….
These controls and tools could reduce the occurrence of outages and power disturbances attributed to grid overload. They could also reduce planned rolling brownouts and blackouts like those implemented during the energy crisis in California in 2000.

Investors see the Smart Grid and Smart appliances as a good investment oppurtunity.
Smart Meters, an attractive opportunity for Investors
This is Frédéric Bastiat’s Broken Window. Take perfectly good equipment and trash it so someone can sell you new. Expect to see the government (or electric companies) mandate smart Meters and the purchase of new appliances that can be switched off by the power companies.

Don’t want smart meter? Power shut off
The rollout of smart electric meters across the country has run into a few snags: one woman doesn’t want one, and ended up in the dark as a result.
You might not think that would be an issue. But it is, because Duke Energy is now beginning to disconnect any homeowner who refuses a new electric meter.

Energy InSight FAQs
….Rolling outages are systematic, temporary interruptions of electrical service.
They are the last step in a progressive series of emergency procedures that ERCOT follows when it detects that there is a shortage of power generation within the Texas electric grid…. With smart meters, CenterPoint Energy is proposing to add a process prior to shutting down whole circuits to conduct a mass turn off of individual meters with 200 amps or less (i.e. residential and small commercial consumers) for 15 or 30 minutes, rotating consumers impacted during that outage as well as possible future outages.
There are several benefits to consumers of this proposed process. By isolating non-critical service accounts (“critical” accounts include hospitals, police stations, water treatment facilities etc.) and spreading “load shed” to a wider distribution, critical accounts that happen to share the same circuit with non-critical accounts will be less affected in the event of an emergency. Curtailment of other important public safety devices and services such as traffic signals, police and fire stations, and water pumps and sewer lifts may also be avoided.

NikiFromNYC,
First you must complete the circuit.
Up to that it is just potential.

These “levelized” prices are nonsence. Peak load prices always are at least 3 times more than base load prices, and can be 10 times more if the peak load cannot be predicted 24 hour before the event. To instantly put generator under load, it must be kept rotated synchronously with the grid frequency, and this imposes additional costs. At least 10% of expected power increase must be kept in the form of rotating, but unloaded generators ready to be put under load. To keep them rotating, some gas must be burned without any electricity produced.

urederra says: @ur momisugly February 16, 2014 at 6:46 am
…. Nuclear looks expensive. I thought It was cheaper.
>>>>>>>>>>>>>>>>>>>>>
It was cheaper until you add in new regulations, regulatory delays and protesters….

Silly me. I was taught to buy cheap and sell high in any sales course I ever took. I ran my business that way for nearly 40 years. According to this idiotic graphic, SCANA/SCE&Gouge is selling power to me at my house for LESS than this thing says they can make it. How do they do that? They don’t.
http://www.powerisknowledge.com/
The grid is selling wholesale power to the little power companies for $36/MWh, 3.6 cents per KWh, today. It varies with demand, of course. One great thing about power, like internet data, you can’t put it in a tank farm and starve the consumers until the price skyrockets, so they sell it for what they can get, today….$36/MWh. That’s the WHOLESALE price of producer’s cost PLUS PROFIT, the investors keeps screaming about. So, the chart is WAY HIGH! I’d guess $36/MWh is double what it costs to produce it, about $18/MWh, which makes more sense. SCE&Gouge is a producer with gas, coal and nuclear plants across SC. Make it for 1.8 cents per KWh and gouge me for 14.656c/KWh, thanks to the SC govt utility regulators, who work for the power companies. Here’s what South Carolinians pay their little electric companies:
http://www.orbgdpu.com/ratecomparison.htm
Orangeburg, SC, wasn’t big enough for SCE&Gouge to worry about back in the 20’s, so the town made its own electric/gas/water/sewer company, owned by the people, who pay 10.5c/KWh on this page from the SAME SCE&Gouge power plants as I do. They buy from SCE&G wholesale at the grid rate of $36/MWh from the first webpage and charge triple for their costs and profits.
I don’t see how anyone reading electric rates across America can believe “Levelized cost is the average cost of power from a new generating plant” is correct. We’d be paying 40c/KWh!
Electric car loads will drive power costs through the roof if they ever make them viable…..

Willis, your cost figures can’t possibly include the costs of backup generation for “renewables,” nor the cost of land for footprints hundreds of times that of fossil generation, nor the greater costs (about 5.5x, on a per-MW basis) for the generation equipment itself, nor the costs of otherwise unneeded substations and transmission lines from the remote locations of “renewable” generation. They plainly don’t consider the need to have spinning reserve running virtually all the time, i.e., burning fuel without injecting power into the grid, and the inevitable substantial use of quick-start generation with heat rates two to four times higher than baseload fossil generation – which means that more fossil fuel is burned to accommodate “renewables” than would be burned if there were no “renewables.” They plainly don’t consider the amount of unused capacity on the transmission lines to “renewables,” which have to be able to handle the full output of the “renewable” generation yet are effectively idle 3/4 of the time for both wind and solar – effectively multiplying the per-MWh cost of transmission for “renewables” by a factor of at least 3 over fossil generation. They don’t consider the unreliability of equipment – all you have to do to see this is drive over the Altamont Pass or Tehachapi Pass here in California, a few times, to see how many of the turbines ain’t turning. Also, the presence of “renewable” generation creates nightmares for managing congestion on major transmission lines and often requires the substitution of more expensive purchased power for cheaper locally generated power. In fact, “renewables” are one of the main reasons for establishing independent system operators (ISOs) and regional transmission organizations (RTOs), to deal with much more complex congestion management problems, which adds a further layer of bureaucratic expense to electricity costs in the form of grid management charges and “congestion revenue rights” (a form of prepaid transmission cost that adds substantially to a utility’s cost of transmission, and which represents a tradeable add-on to prices similar to carbon credits, and like them, creates no economic value).
In short, there are a lot of variables and inefficiencies associated with “renewables” that never seem to be taken into account, and in fact they are deliberately ignored by the people touting them in order to convince uninformed people to go along with what is actually a scheme for transferring wealth from low- and middle-income ratepayers and taxpayers to billionaire investors in projects that are both uneconomic and environmentally ruinous. Why should ordinary folk pay double and triple prices for electricity and extra taxes so that billionaires can get richer? Why should US manufacturing be made less competitive with needlessly higher electricity costs? That’s the real issue here, along with the environmental destruction and slaughter of wildlife caused by “renewable” energy.

All I know is that in Australia electricity prices keep going up. The Australian Bureau of Statistics shows that from Jun 2007 to Dec 2013 the consumer price index rose by 19%, but electricity rose by 111%.
A March 2012 paper, Australian Electricity Prices: an International Comparison, commissioned by the EUAA shows that Australia’s electricity prices are very near to the highest in the developed world and seemingly set to reach the highest.
“Rising electricity prices are having a major impact on the cost of living and of doing business. All Australians know this and are naturally concerned about it,” Mr. Roman Domanski, Executive Director of the EUAA said.
“This paper exposes the myth that Australia continues to have low, or even mid range, electricity prices. Electricity is becoming a lot less affordable for both households and businesses and our prices are now a source of national weakness rather than strength.”
AEMO publishes annual prices paid to generators but they seem to jump all over the place, and are clearly not connected to the prices I pay.
For Victoria, $27.62/MWh in 2004/5 to $54.27/MWh in 2013/14 (or 5.4 cents/KWh).
The Origin Energy website states that the average household consumes about 6.5MWh of electricity per year, and that costs $1500-2500 per year depending on location so that equates to $231-385/MWh or 23-38 cents/KWh. They also show a chart that indicates about 10% of that is GST tax, Government green schemes about 15%, about 10% goes to Retailers, generators get about 20% and networks 45%. (I suspect that network portion is increasing in order to cope with “non-dispatchable” power from solar and wind.)
Why won’t our governments tell us what the typical costs in Australia are for each power source in cents/KWH, given each gets an appropriate return on investment?
And then tell us in simple terms what goes into the average price of our electricity in cents/KWh.
ENOUGH!! Get rid of the CO2 tax, and then the Renewable Energy Target (Tax).